Korean investors in anxiety as Korean banks do not issue new accounts for crypto-trading

[Korean Exclusive News]

Author: Shin Yi Jin, South Korea

Recently, there has been rising criticism on the current crypto market situation where there is increasing number of new crypto exchange markets but no banks out there issuing new accounts to investors for crypto-trading. The criticism is that such situation only puts investors under potential downfall.

According to a related industry, Small-medium exchange markets excluding main exchanges such as BIthumb or Coinone uses indirect method of receiving users’ payment on company account before transferring the coins to their accounts on the exchange market. With new exchange markets appearing at a fast pace, there has been a criticism that the government has to come up with a guideline regarding cryptocurrency trading as soon as possible.

▶ Increasing number of exchange markets but banks not issuing any new account

Bank of Korea (Source: CryptoCurrency Times)

In South Korea, there are many operating cryptocurrency exchanges including Bithumb, UPbit, Coinone and Cobit known as the ‘Big Four’. Other exchanges such as Cashierest, HuobiKorea and OKcoinKorea are also actively operating.

An expert in the industry shared that “the trading volume in the local markets is constantly decreasing but the number of crypto exchanges is increasing” and “new exchanges require caution from the investors because of their indirect method of using a company account due to the difficulty of opening a new account with the bank”.

The problem is that the time when the bank can issue new accounts for crypto-trading is unknown. Last January, the government practically permitted crypto-trading by implementing the ‘real-name trading system’. However, the banks are not issuing new accounts needed for investors to engage in crypto-trading.

A local exchange market personnel criticised that, “banks are not even issuing company accounts for companies that wants to do blockchain business, and they will never open an account for crypto-trading” and that “they are not issuing the accounts because they are afraid of the government which is negative about cryptocurrencies”.

Another related personnel said that, “(the exchanges) do not want to practice the indirect methods as well but (the exchanges) have no choice because of the bank and the government” and that “(the government) is trying to push the blame on the banks for any issues pertaining to crypto-trading by appearing like they support cryptocurrencies by implementing the policy”.

▶ Increasing number of troubles for exchanges

(Source: BTCManager)

With the government not fully supporting nor banning crypto-trading, there has been increasing troubles for various local exchange markets. For example, Bithumb faced fierce opposition from its users regarding its listing of POPCHAIN and had to postpone the listing in the end.

In order to prevent more troubles from appearing, the exchanges are engaging in some changes themselves to enable banks to issue new accounts to its users. The exchange markets are actively introducing new measures to 1) prevent money laundering; 2) strengthen actions taken against abnormal trading; 3) propose and execute Discretionary Regulations.